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Full text of "Letter - WAIS Inc Planning Meetings"

WAIS Inc 



Wide Area Information Servers 



June 18, 1994 



WAISites, 

This should be a fun and productive meeting where we get to direct WAIS 
Inc's next 2 years. Thank you for helping. 

WAIS Inc is one of very few profitable Internet companies— a very hot area 
with lots of new entrants. We have the opportunity to grow this company 
hard and fast. 

We have put together a set of materials about our company, but other 
materials are available. Please read these materials and suggest inspiring 
background reading for others to read. 



Sincerely yours. 




Brewster Kahle 



1040 Noel Drive Menlo Park CA 94025 



415.617-0444 



fax 415,327.6513 



WAIS Inc Planning Meetings 

Brewster Kahle 
June 5, 1994 
Company Confidential 

Goal: Create the company product and partner strategy for the next 2 years. 

How: Sequester the board and management, with advisors and employees 
when appropriate. The result is a written plan somewhat like a business 
plan, but with the focus of guiding management. 

When: June, 1994. 

June 18 Distribute materials 

June 20 Staff meeting with participants 

June 19,21 Planning meeting at WAIS Inc offices 

Rest of June Follow-up and Refinement 

Who (alphabetical): Bill Dunn, Brewster Kahle, Bruce Gilliat, Gary 
Hromadko, John Duhring, Nick Scharf. Others as appropriate. 

After: Advisory council for our direction: Terry Winograd Stanford, Peter 
Lyman UCLA, Bill from AOL, Lew Tucker TMC, Bob Clark EB, ...? 

Suggested Agenda: 

What lessons can we draw from our 2 years? 
What markets are we are trying to serve? 
What is our product/service going to be? 

What technology changes and competition is likely in our market? 

What is our partner strategy? 

What are our revenue targets? 

How much outside money do we need? 

What company structure is required meet this plan? 

I have included a set of materials that give some background on where we are 
now. This is not meant to be a proposal, but rather background on our 
company. 



1040 Noel Drive Menlo Park CA 94025 



415.617-0444 



fax 415.327.6513 



Revenue By WAIS Fiscal Quarter 



$1 ,200 



w $1,000 

T3 
C 
(0 

3 $800 
o 



CO CO CO CO 

C3) O) C3) C3) O) O) 



T-CMCO-'+T-CMCO'^T- 

000000000 
Quarters 



CM 
O 



Contracts 



Products 



Services 




t 10 lO LO LO 
C3) O) O) C3) c:) C3> 



CO 

o a 



Not confirmed numbers. Fiscal 94 is July I, 1993 to June 30, 1994 (almost 
over) 



Fiscal 
revenue: 
Expenses: 
Profit: 



1994: 

1,338,287 
788,089 
550,198 



1995 bookings 
348,785 



1995 
3M 



1996 
lOM 



Company Confidential 



Draft June 19, 1994 



WAIS Inc Current Business 



Brewster Kahle 
June 6, 1994 
Company Confidential 



WAIS Inc sells tools and services to network publishers. Network publishers 
are traditional publishers, government, libraries, and distributed corporations 
that want to make textual and image information available over networks. 

To achieve these goals we pursue contract work, sell products, and are starting 
to run a network publishing operation ourselves. Broken out here is 
government in DC work since it is growing to be more and more distinct 
from our Menlo Park operations. 

Overall business plan: 

1993 Contract work, build the product 1.0 

1994 Sell the product, build info services, continue contracts, build v 

2.0 

1995 Sell products, scale up Info Systems, license parts of product 

1996 Info generating significant royalty, selling products, high profile 
contracts 



Government Systems and Sales for Fiscal 1994 (July 93-Tun 94) 

Selling to the goverrunent is 50% of our business broken up into contract 
(17%) and product sales (33%). Our two big contracts came through and are 
proceeding well. The product sales are often closely related to the contract 
work. We have one person full time on contract fulfillment and sales (Kevin 
Oliveau), and Brewster is spending a decreasing amount of time irt sales. 

If we do not actively push this area, we will probably lose it. Strategy 
decisions: 

• Make a self supporting DC office (total cost: $200k for fiscal '95) 
® More on sales front? 

Q4 93-Ql 94: Open Source, and DTIC are our major accounts for building 
information services. DTIC based in DC and Open Source is both Menlo Park 
and DC. 



Company Confidential Draft June 19, 1994 



4 



Systems Sales Fiscal 1994 (Tuly 93-Tun 94) 



This contract work is pre-paid work for customers (other than government) 
(15% of our business). This breaks into publishing systems and protocol piece 
integration (4% of our business). 

On publishing systems we have 2 people and 2 main contracts (John Duhring, 
Dan Aronson; and Dowjones and Scholastic). On protocol licensing we have 
1 person and 2 new contracts (Margaret St Pierre; Fulcrum and Conquest). 
Sales is a decreasing part of Brewster's time. 

Both of these areas will need at least 1 more technical person each. 

Strategy decisions: 

• Do we focus on sales to publishers? 

Our selling structure on this has been to write lots of proposals. Getting more 
efficient at this is important. We are missing opportunities in this area by our 
proposal writing volume. We are starting to move from $25k-$50k proposals 
to $100k-200k proposals. 

Q4 93-Ql 94: Dowjones is our major account based in Menlo Park. 
WAIS Inc Products Fiscal 1994 (Tuly 93-Tun 94) 

Product sales are "on-the-pricelist" sales. 68% of total sales = 33%gov + 
33%com + 2%edu. These are often part of contracts so the sales of our 
products often resemble contract sales. Most of our product sales have come 
from people who have used the freeware for a long time. 

We stand to fall behind this area if we do not invest more in product 
development. Strategy decisions: 

• Reorganize our server product to allow independent development? 

• Better marketing and OEM sales efforts? 

• Recruit an Engineering manager? 

Our pricing of our products is lower than competition (other than freeware) 
to try to get volume. We, only now have a sales force, so our success here is 
limited. OEM sales where our product is bundled or pieces modified and sold 
are an increasing part of our sales. The sales cycle is long— we have not gotten 
precise numbers but it is over a year since they start using WAIS, and 6-9 
months after they start to consider buying the commercial software. 

This year's strategy is to add a marketing person to this line of business and 
continue to upgrade our server product line while adding new components 
to the product line. 



Company Confidential Draft June 19, 1994 



5 



The company structure for supporting this work is very flat— An engineering 
plus marketing meeting helps form the basis of the products we will pursue, 
and then individual project leaders help define the product features and 
schedules. Sales of these products is done by Bruce Gilliat and Kevin Oliveau. 

Goals for next year: Have the finest commercial Internet server product on 
the market. Gateway to many popular networks. Understand the sales cycle 
and process. 



Company Confidential 



Draft June 19, 1994 



6 



Information Services from WAIS Inc. 

Pfesented by John Duhring (Junel9, 1994) 

What we have learned: 

• Publishers want control over their assets 

• Publishers want access to many markets from one source 

• Users value the experience derived from the service 

• WWW is adequate for now 

• WAIS-based sytems provide cost effective archictectures for; 

- Subscription services (DowVision) 

- Sponsored services (Intel) 

- Catalog services (Scholastic) 

• Issues exist but are being addressed: 

- Security 

- Billing 

- Load balancing/ scalability 

Current WAIS Inc. strategy: 

• Team with recognized brand names 

- Knowledge of market 

- Design capabilities 

- Metadata development 

• Prototype /Develop /Operate services 

- Recover costs up front 

- Participate in operational revenue 

• Derive enhanced products for sale by WAIS Inc. 

- Name brand partners create product testbeds 

Building "the Information Interface" (our WWW advantage) : 

• Store content in a DB with easy to use access points 

• Build html documents of the fly as they are retrieved from the db 

• Automatically generate hypertext links from metadata to find "more like 
this one", with editorial guidance from the publisher. 

Operational process: 

• Entertain/ demo to prospect, to arrive at service concept and 
objectives/paybacks 

• Determine leverage points, estimate time and resource requirements in 
conjunction with engineering 

• Propose system in conjunction with sales 

• Prototype, build, operate 

Resources: 

• One engineering manager, one systems administrator (TBH) 

• Need product managers, and more engineers to meet demand 



Company Confidential 



Draft June 19, 1994 



1 



Technology Outlook 



Brewster Kahle 
June 16, 1994 
Company Confidential 

Roughly, there seems to be a few trends that affect us (what am I missing?): 

• Dial-up connections to the Internet will be a non-issue bringing 
TCP/IP to home users at 14.4kb/sec (and newer faster modems). Small 
business are still out in the cold. 

• World Wide Web (Mosaic) has taken the Internet by storm. It is 
deficient, but usable. It future is uncertain because of a central entity to keep it 
together. We may see many semi-compatible commercial systems based on 
different versions of different protocols. Z39.50 now has an uphill battle. 

• Some of CD-ROM market is turning to online. This trend could 
speed up. 

• All publishers must have a network publishing strategy (because of 

hype). 

• Unix is the dominant server platform, but something else is likely to 
appear for the corporate market based on lack of user-friendly aspects. NT? 
Windows (Cairo)? OS2 is losing; Taligent is late; Novell is possible, but... 

• Internet growth is strong, but few corporations have TCP to the 
desktop, but it is growing. 

• Many many startups are jumping into the Internet non-market. 



Company Confidential 



Draft June 19, 1994 



7 



Sample Internet Server Product 

Brewster Kahle with input from Harry Morris 



Some major options: 

License pieces to others 

License IR pieces from others 

Corporate information server 

Internet publishing platform for documents 

Product description: Internet publishing platform for documents. 

Platforms: Unix, Windows, CDROM 
Time till first ship: 12-18 months 

Protocols: HTTP(WWW/Mosaic), Z39.50-v2 (client-server) 
People: 3 to start, 7 by the end. 

Eng mgr, 4 engineers, 1 documentation, 1 support, .5 marketing 
Cost: $1M for building 1.0. Marketing? 
Cooperating companies: Intel, Apple, Sun, AOL 
Competing companies: freeware. Mosaic Inc, InfoSeek, 

NovX?, Oracle, Microsoft. 
Distribution: freeware eval version, 

$lk-$5k small server, 

licensed big version. 
Features: 

billing, security 

modular for licensing and modification 
Integrated CDROM/Online solution 
Authoring 
SGML integration 



# customers: 
Revenue / cust($/yr): 



1994 

30 

20k 



1995 

100 

15k 



1996 1997 
700 2000 
5k 5k 



WAIS Revenue ($): 



.7M 



1.5M 



3.5M lOM 



Company Confidential 



Draft June 19, 1994 



Sample Internet Service 



Some major options: 

Be a service bureau for publishers 

Go after sucessful CDRCDM db's to put data online 

Go after sucessful Dialog db's to put them on the Internet 

Go after catalog type sales to sell products 

Construct a information service for businesses 

Construct a information service for medicine 

Construct a information service for law 

Construct a information service for techies: MIS/sysadmins 

Internet library system: bboards, email, ftp (basis of an AOL) 

Product description: Information Service for Businesses 

Platforms: Novell Windows, Lotus Notes, Mosaic, FAX 

Time till first ship: 12-18 months 

People: 4 to start, 9 by the end then large sales staff. 

Publisher sales, Eng mgr, 3 engineers, 1 UI designer, 1 support, 1 

sysadmin, 1 marketing. 
Cost: $1.5M for building. Tremendous cost to establish our name and 
reputation. 

Cooperating publishers: Dow Jones, NYTimes, ... 
Cooperating tech companies: Novell, Lotus, Mosaic Inc 
Competition: Dialog, Nexis, etc.; Reuters, AP, LATimes; new Inet co' 
Sales strategy: telesales direct? var? 
Features: 

Comprehensive listings of: companies, products, people 
Alerts based on profiles, (human assisted?) 



Subscribers: 

Revenue/subscriber ($/yr): 



1994 







1995 

2k 

100 



1996 

10k 

100 



1997 

50k 

100 



WAIS Revenue ($): 







.2M 



IM 



5M 



Company Confidential 



Draft June 19, 1994 



Sales and Marketing Perspective 

Bruce Gilliat 
6/18/94 



LICENSES - SINGLE SERVER, SITE AND ENTERPRISE 



Customers to date = Government & Universities 



25+ sales in-process to Fortune 2000 for archiving/ indexing libraries 



To sell two to ten licenses per week WATS must: 



Same-day phone call return 



15 minute explanation of "Where WAIS fits" 



Understand customer situation/ application 



Understand procurement cycle 



Mail packet of relevant info 



Follow-up via telephone & understand competition 



Requirement today for one telemarketer 



VARs are there for us Internationally - support via telemarketer 



ON-LINE SERVICES 



Publishers at our doorstep 

Need definition of what WAIS online services department does 
First meeting w/publisher 

WAIS history 

- Brewster at MIT 

- IMC/KPMG/ APPLE/DOW JONES 
Where WAIS fits 

Online successes (DJ, EB, Scholastic) 
What prospect must know 

- How much data? 

- At publisher or at WAIS? 

- Who builds home-page, etc. 

- What do they want from an online offering? 
Demo on the Internet 

- WEST law 

- EINet 

- Dow Jones 
-EB 

- Supermodels (photos /graphics) 

- Internet Shopping Network home page 
WAIS needs an account strategy at this point 

- today, clients leave with "wow" but no "to-do's" 

Need strategy to get proposal "out-the-door" 

Upon receipt of order, need online manager to hand-off 

Resources needed to sustain/build this business unit 

Does WAIS want to implement this strategy to CD-ROM market? 



ONLINE CATALOG BUSINESS (Inmac) 

Is this business the same as the online business above? 

Is outline of steps to complete a project the same as online above? 



CUSTOMER SERVICE ONLINE 

Novell, Cisco Systems, etc. 

Is this a market that we are missirig? 

Is outlirie of steps to complete a project the same as online above? 

These clients do not seem to be coming to us as are publishers and license customers 



PROTOCOLS & COMMUNICATIONS - WAIS' OEM CUSTOMERS 

On-the-way with Fulcrum, ConQuest and Dataware 
Contacts made in exploratory stage with PLS, Silver Platter, and Excalibur 
Need strategy and time for others Oracle, Verity, Frame, and others 
Need account profiles of who's who and who competes with who 

Opportunity for WAIS to become the de facto protocol suite for search engine market and 
for all organizations posting to the Internet 

WAIS approaching need for product manager to support OEM 

- White papers for Fulcrum sales force 

- Joint press announcements 

- Support desk for sales forces & their channels 

- Define how "technical" support will be handled 

- Forecasting revenues is hard, filed visits required 



VAR CHANNEL(S) 

There are VARs & classical Systems Integrators ready to represent WAIS for additional 
market share 

- Clarinet application 

- Internet connectivity VARs looking to get into software (WAIS, Mosaic, etc.) 

- Systems Integrators such as Highland Digital that need to know about us 

- Bruce to visit in Bay Area 

Overall strategy is to hook a few VARs in the SF Bay Area and Internationally, then 
expand out-of-state 



PUTTING OTHERS IN BUSINESS 



Systems Integrators with Internet experience 

Brewster friends who do not make money on the Internet today 

- Do we want to bring them along for the ride? 

- Do we want to push them for applications and their own profitability? 

- Do we want to ignore them? 

"I want to provide and resell online services, let me come-in and learn more about WAIS" 
Does WAIS want to assist these people - or, do we have time to? 



RFPs 

Big RFPs will begin coming out as large organizations start to row a wish list for what they 
want in an online service 

University of Illinois bid that SUN is sending to us is 300 pages, and SUN is asking WAIS 
how to respond to the bid 

Another business opportunity, but a resource gulper along the way 

The government and university customer that are our license customers today will issue 
RFPs in one year when they realize that they have a wish list 



MARKETING ISSUES 

Need version two of Internet World Bruce/John/Dia cut sheet (color, etc.) 
Need fold-out on "Where WAIS Fits" that states our advantages 
Need fold-out on online services that we decide to support from list above 
Trade Show strategy (let's pick 'em, do 'em, and everybody helps) 
Advertising - is it in WAIS' future in the next 24 months? 



White papers on new ideas and easy-to-understand on what we do 

- WAISgate 

- Release two of WAIS 

- What features does it provide to our existing customers? 

- What features does it provide our prospects? 

- Does a new market open for us from the release? 

Strategic Relationships 

- SUN, DEC, SGI 

- Several projects within SUN alone 

- Big Bangs 

- Seminars (such as Mountain View) 

- ISV's and letting them know about us 

- Brewster's trip to Aspen 

- SUN Sites 

- All of these are worth something to us 

- R.R. Donnelley's concept of setting de facto orpine standards 

- Forums such as MIT/Stanford 

- Industry watchdogs such as Yankee Group, Dataquest, etc, how do we work with 
them? 

The Press 

- With the next step of success we will need consistent stories to the press 

- Need to release our own press releases on Fulcrum and how it impacts our 
business 

- Designate single point of contact to all staff of WAIS when the press calls 

Friends 

- How much support do we provide to make them successful? 



Partner Strategy 



Currently we do not have a "partner strategy", but it would help us to 
deliniate one. This is a list of our current partners to give a background. 

A "partner" should be an important relationship with some multiplier effect. 
What do we want to get out of these important companies? Are we missing 
something? Are we sleeping with the enemy? What focus would be helpful? 

Hardware companies: Intel, Apple, Sun 
Client vendors: Ensemble, AppleSearch 

Vertical App companies: Helpdesk, library, publishers, CDROM companies 

Search engines: Fulcrum, Conquest, PLS 

VAR/Integrators: PRC, RJO, NZ, Italy, France 

Publishers: Dowjones, EB, Scholastic, WestLaw 

Foreign subsidiaries: Fujitsu, EB Japan 

Network distributors: AOL 



Company Confidential 



Draft June 19, 1994 



10 



Current Company Structure 

Brewster Kahle 

June 18, 1994 
Company Confidential 

Ownership: 74% Brewster, 26% pool, about 14% allocated. 

Funding (brewster): $70k currently, peaked at $100k. 

Board: Bill Dunn, Brewster Kahle, John Duhring 

President: Brewster Kahle 

VP Business Info Services: John Duhring 

VP of Sales Marketing: Bruce Gilliat 

Dia Cheney: Human resources, bookkeeper, accnts payable receivable 

Harry Morris: Architect, primary product development 
Kevin Oliveau: DC manager/ sales /contract fulfillment 
Ben Lai: Technical Support 

Margaret St Pierre: Protocol engineer (based in Philadelphia) 

Gary Hromadko: Financial advisor to the board 

Nick Sharf: Financial advisor 

Ottavia Bassetti: Consultant on publishing projects 

Lawyers: Wayland Brill of Hopkins and Carley 

Bank: University National 

Major options: 

Pursue sale of the company (AOL) 

Raise money by equity corporate partners (AOL, Fujitsu?) 
Raise money by VC (put us on a going-public track?). 
Donate 51% of stock (brewster's) to a new non-profit organization. 
Start subsidiaries: 

WAIS-fed DC spin-off, Fujitsu joint venture, EB Japan joint venture. 



Company Confidential 



Draft June 19, 1994 



11 



WAIS Inc. 1993 Cash Flow Projections 


Company Confidential, 6/8/94 




1993 Total 


1994 Total 


Jul-93 


Aug-93 


Sep-93 


Oct-93 


Nov-93 


Dec-93 


Jan-94 


Feb-94 


Mar-94 


Apr-94 


iaay-94 


Jun-94 


Rest of 94 


1996 


1996 


fr-i 


^ 


































Receivables jm> 




































Curtin ~ [/■" 


5,000 



































U tenn 




5,000 






5,000 


























Stanford Univ 




15,000 














15,000 


















FHice 


50,000 



































TotakEdu 


55,000 


20,000 








5,000 











15,000 






























































S 


5,000 


72,000 


2,000 








60,000 


5,000 




5,000 
















intei 




10,000 




10,000 




























pacbeil 




5,000 


5,000 






























Fujitsu 




155,000 










55,000 
















100.000 






nu 




5,000 


















5.000 














Boeing 




69,300 








34,300 




35,000 




















NCMS 




15,000 












15,000 




















MarCorp 





































WestLaw 




60,000 












30,000 






30,000 














Deipfii 




15,000 


















15,000 














Adobe 




12,000 




















12,000 












NY Law Publish 




15,000 
























15.000 








Novell 




15,000 






















15,000 










Subtotal: Com 


5,000 


448,300 


7,000 


10,000 





34,300 


115,000 


85,000 





5,000 


50,000 


12.000 


15,000 


15.000 


100.000 












































Mitre 




50,000 






30,000 


5,000 












15.000 












Eisenhower/Ohio 


5,000 


10,000 






















10.000 










GFO 




40.000 














15,000 


10,000 






15.000 










EG&G 




100,000 








15,000 












85,000 












LL Nafl Labs 




15,000 








15,000 
























USGS 




5,000 








5,000 
























Ub of Congress 




12,500 


















12.500 














SAIC 




5,000 












5,000 




















HIS 




15,000 


















15.000 














DOE- Tenn 




15,000 




















15,000 












Los Alamos 




15,000 




















15.000 












Govt Site License 




160,000 


























160.000 






Subtotal: Gov 


5,000 


442,500 








30,000 


40,000 





5,000 


15,000 


10,000 


27.500 


130.000 


25.000 





160.000 








Total Products 


65,000 


910,800 


7,000 


10,000 


35,000 


74,300 


115,000 


90,000 


30,000 


15,000 


77.500 


142.000 


40.000 


15.000 


280.000 












































Perot 


200,000 



































Scholastic 




25,000 










25,000 


















25000 




NASA JSC 




45,570 
















22,785 






22.785 






22,785 




Dow Jones 




75,000 














50,000 











25.000 




25000 




Fulcrum 




50,000 
























50,000 




150,000 




Pandora 




4,500 












4,500 




















Intel 
































30000 




Total Systems 


200,000 


200,070 














25,000 


4,500 


50,000 


22,785 








22.785 


75,000 





222,785 













































































Lib-o- Congress 


12,000 


19,500 






19,500 


























Secret 


80,000 



































DTIC 




74,000 




















50,000 




24,000 




126,000 




Open Source 




129,167 
















35,000 


81,167 






13.000 








EPA 




4,750 




4,750 




























Total Gov Sys 


92,000 


227,417 





4,750 


19,500 














35.000 


81,167 


50,000 





37.000 





126,000 










































Total 100% 


357,000 


1 ,338,287 


7,000 


14,750 


54,500 


74,300 


140,000 


94,500 


80,000 


72,785 


158,667 


192,000 


62,785 


127,000 


260,000 


348,785 









































Projected Receivables: 


































Total Products 


65,000 


910,800 


7,000 


10,000 


35,000 


74,300 


115,000 


90,000 


30,000 


15,000 


77,500 


142,000 


40,000 


15,000 


260,000 


1,850,000 


3,000,000 


Totai Systems 


200,000 


200,070 














25,000 


4,500 


50,000 


22,785 








22,785 


75,000 





750,000 


3,000,000 


Total Gov Sys 


92,000 


227,417 





4,750 


19,500 














35,000 


81,167 


50,000 





37,000 





400,000 


1,000,000 


Total Revenue 


357,000 


1 ,338,287 


7,000 


14,750 


54,500 


74,300 


140,000 


94,500 


80,000 


f'ZJBS 


158,667 


192,000 


62,785 


127,000 


260,000 


3,000,000 


7,000,000 






































Investment-bk 




































Total 


4,211 


44,500 


20,000 


4,500 


20,000 








































































Expenses 


Total 


Total 
































G & A (totaO 


4,592 


30,800 


2,289 


394 


5,651 


714 


777 


1,388 


1,134 


2,361 


5,278 


1,706 


4,959 


4,150 








Rent 


15,310 


36,240 




4,000 


3,000 


3,000 


3,000 


3,000 


3,300 


3,390 


3,320 


3,270 


3,480 


3,480 








Equip&Supplvm 


82,460 


100,608 


994 


1,509 


2,379 


12,450 


19,161 


12,849 


7,295 


12,185 


3,500 


7,029 


7,656 


13,600 








Accounting 


5,000 


8,700 


500 


500 


1,400 


3,460 








870 


450 


1,120 








400 








Taxes 


20,103 


89,570 


1,240 


1,779 


3,236 


3,422 


688 


1,037 


3,907 


14,795 


14,396 


13,617 


15,453 


16,000 








Legal 


20,787 


8,715 


1 ,268 


1,268 


878 


1,083 





995 


910 





514 


899 





900 








Mktg &Ad (T) 


7,344 


12,709 











170 








1,087 


3,586 


1,544 


600 


3,122 


2,600 








Phones/Network 


17,391 


37,817 


1 ,532 


1 ,532 


2,649 


81 4 


4,310 


7,81 1 


3,862 


4,098 


2,417 


2,289 


3,303 


3,200 








Travel 


39,762 


36,870 






2,202 


6,101 


5,021 


3,723 


1,150 


3,373 


2,590 


3,964 


5,246 


3,500 








Salaries 


237,789 


382,502 





14,895 


30,232 


22,124 


29,152 


97,173 


36,424 


28,951 


32,086 


28,035 


30,998 


32,432 








Employee Benefit 





14,233 











306 





1,100 


1,111 


3,326 


1 ,663 


2,812 


1,105 


2,810 












































Total 


*T *iJ 'hi' ( »J W O 


788,089 


7,823 


25,877 


51 ,627 


53,644 


62,1 09 


129,075 


61,050 


85,422 


88,847 


64,221 


75,322 


83,072 














9,478 


23,334 


59,493 


























Run 100% 


-89,327 


594,698 


19,177 


12,550 


35,423 


56,079 


1 03,970 


74,395 


93,345 


80,708 


1 50,528 


278,307 


265,770 


309,698 


569,698 






Run Total 


-89,327 


594,698 


19,177 


12,550 


35,423 


56,079 


126,970 


92,395 


111 ,345 


98,708 


168,528 


296,307 


283,770 


327,698 


587,698 










































Employees 




































Engineers 






3 


3 


3 


3 


3 


4 


5 


5 


5 


5 


5 


5 








Mgmt/Sales 






2 


2 


2 


2 


2 


2 


2 


3 


3 


3 


3 


3 








Support 






1 


1 


1 


2 


2 


2 


2 


2 


2 


2 


2 


3 








Total 






6 


6 


6 


7 


7 


7 


9 


10 


10 


1 


10 


1 1 









Slaves of a New Machine: 
Exploring the For-Free / For-Pay Conundrum 

Presented at the Fifth Conference on Organizational Computing, Coordination, 
and Collaboration: Making Money on the Internet 

Austin, Texas, May 10, 1994 

Laura Fillmore 
President, Online Bookstore (OBS) 
laura@editorial. com 



I very much appreciate being here today, and thank Andrew Whinston and the 
people at the IC2 Institute, RGK, Texas Internet Consulting, and the University of 
Texas for inviting me to speak at this conference. Making Money on the Internet. 
I've picked up a lot of good tips, which I hope to apply at the Online Bookstore 
(OBS) soon, because at the Online Bookstore I am *not* making money by 
publishing on the Internet. And I don't know anyone who is. Since 1992 our 
company, the Online BookStore, has been involved in Internet publishing, and 
we have found it an exercise riddled with paradox and the unexpected, frequent 
bouts of optimism and what-if idea sessions, a conundrum whose parameters 
keep shifting. 

We have enjoyed commercial success from publishing *about,* talking and 
meeting and consulting *about* publishing on the Internet, but are we making 
money from the real live act of online publishing for a price? Not yet. As far as I 
can tell, publishing intelligently in the distributed Internet environment still 
*costs* money. I don't think I am alone in this realization. I am coming to suspect 
that there may be no such as thing as publishing on the Internet, or rather, 
publishing according to the definition of publishing as we know it from our 
familiar paper reference points. This may not be the news you came to hear, but I 
am happy to share what insights I have with you. 

The Online BookStore started out under the umbrella of Editorial Inc., a 
profitable publishing services business which I started in 1982, and which 
produced hundreds of books for publishers. In 1991, we had 19 employees, three 
offices, three shifts around the clock, and used desktop computers to produce 
such titles as _The Sports Illustrated Almanac_ for Time/Warner, Andy Warhol's 
biography for Bantam Books, and _Doing Business in Kuwait_ for Ernst and 
Young. We were part of a services industry trafficking in paper. Using 
computers, we were able to integrate the various publishing disciplines under 



one roof, calling on hundreds of freelancers to supplement our in-house working 
staff and become a publisher's publisher of sorts, a virtual corporation. 

We caught the desktop publishing wave when it was just a swell out at sea in the 
mid-eighties, and, in the resulting shift in the typesetting business from large 
centralized composition companies to distributed PC-based typesetting 
platforms, we rode the wave, and produced books using page composition 
systems such as PageMaker, Ventura Publisher, Scribe, TROFF, TEX, and Polaris 
Printmerge. Polaris PrintMerge was my favorite, not only because it was the first 
and crudest PC-based typesetting platform, but because it introduced me to the 
notion of electroruc slavery, our topic of the day. Turn the clock back ten years, 
when my company was five people strong and I was salvaging a typesetting job 
someone had abandoned in frustration before the machine; it was a manual for 
hospital custodians, arranged in three columns, detailing how to keep a hospital 
clean and sanitary. The janitors, our future readers, were supposed to start on the 
upper left-hand column of each page with the instructions to don their uniforms, 
and then by the bottom right hand entry, they had to "clock out wearing 
uniform". Every page had the same layout for a different duty—mopping the 
floors, emptying the trash—all items in all columns had to align three across. 
Before the days of WYSIWYG, assessing one's success as a typesetter meant 
printing out again and again, at about five minutes per page. The deadline 
loomed. I would type and wait, type and wait, a period here, a comma there, a 
drone before the keyboard, caught up in the electromechanical semi- idiot 
production cycle. When I finally clocked out, called the Fed Ex man for the 
finished package, I vowed never again to wear the uniform of typesetter. I would 
hire typesetters. 

This was my first personal experience with electronic servitude in the publishing 
context, though I didn't realize it at the time: I saw it as a business opportunity 
instead, which from a commercial standpoint it certainly was. I learned that users 
of Polaris PrintMerge, no matter how smart, would become the victims of badly 
designed software, would turn into drones, because that was their inevitable 
function vis-a-vis their task and the tools afforded them for completing the task; 
the humans workers functioned as the erring component, the wetware, charged 
with coaxing a right-or-wrong result out of a desktop computer. 

This was the much-touted cutting edge, offering profit without honor and the 
opportunity to hire others to work Polaris PrintMerge till a better program came 
along— which happened startlingly fast. I hired others to stay up all night staring 
into screens, printing out, cursing the widows and orphans, and printing out 
again. This first generation of servitude involved securing output from single, 
unconnected machines, getting desktop computers to emulate the work of the 
large dinosaur machines lumbering reluctantly off into typesetting antiquity; we 
were selling output from these PCs, trying to recreate type of such quality that it 
did not appear to be what it was— computer byproduct. So busily formatting the 
output of computers gave us a way to use and begin to understand the machines. 



but of course, in hindsight, how could we have been anything else but servants 
to the machines? We did not apprehend the utility of our machines; using 
computers to wrestle with the static and formatted output of single machines 
was an error few perceived and many committed, are still committing.. We do 
what we know, and, with the gift of hindsight, can see that this act of 
manufacturing type on paper, produced by distributed computers sited in 
decentralized locations, constituted an intermediate step from static to kinetic 
publishing. 

As so often happens with computers, the cutting edge of Desktop publishing 
became a swamp and then a backwater. It took about five years for publishers to 
discover that there are cheaper ways to typeset than paying New England style 
wages- particularly when they can demand from desktop publishers something 
they never got or even knew they wanted from the large type houses—ownership 
of the typesetting files and the macros that created them. Savvy publishers types 
took advantage of the distributed environment coupled with the 
disconnectedness of it all to put the servitude of function together with the 
servitude of finance. People type fast when they are hungry, and a large part of 
the typesetting business, the keyboarding at any rate, after the advent of desktop 
publishing, migrated to romantic "offshore" locations— doublekeying in Taiwan 
or Jamaica or the Philippines proves more accurate and far less costly than 
paying a Massachusetts resident a living wage. So, while beginning to explore 
new avenues of employment in the areas of CDs and hypertext publishing, we 
continued to compete in the typesetting field, and got good prices for a while in 
Utah and the Southwest, even hired freelancers third-hand in Singapore and 
Haiti. Freelance typesetters in Haiti, the publisher hired me; I hired someone 
stateside to hire someone in-country to hire the keyboarder, and still, the 
publisher ended up paying maybe half what the job would have cost him at $15 
per hour. Our topic today is slavery. 

In 1895, before Polaris Print Merge was ever invented, Oscar Wilde wrote, in 
"The Soul of Man Under Socialism," that "Unless there are slaves to do the ugly, 
horrible, uninteresting work, culture and contemplation become almost 
impossible. Human slavery is wrong, insecure, and demoralizing. On mechanical 
slavery, on the slavery of the machine, the future of the world depends." 
Somehow, in the arena of desktop publishing typesetting, human servitude to 
the exacting output demands of the machine is more the norm. The focus is 
output, and people become blind inputters of accurate information in the same 
way that minimum wage workers in supermarkets do when running barcodes 
over optical scanners. 

I'm painting a grim picture, but the tide is about to turn. In the late '80s, we began 
to produce and typeset books about computer networking, books focusing on the 
structure and function of globally interlinked computers, which seemed to elicit 
life from people when used as a communications medium, rather than 
demearung them when used as an output medium. One such title, probably the 



first book on computer networks worldwide, was John Quarterman's book "The 
Matrix," published by Digital Press, which concerns computer networks and 
conferencing systems worldwide. In 1989, when we were working on the 
production of this book, the author introduced me to the then alien concept of 
electronic mail. My assistant would pick up mail from my lone correspondent, 
the author, print it out, put it in my in box, and I would handwrite responses 
which she would input and send back in due time. It sounds quaint, but it 
seemed to make sense to me at the time-in the same way computerized 
typesetting on distributed though uncormected PCs made sense. We do what we 
know. 

Some of the messages he would send had nothing to do with the text of the book 
itself, however; messages posted to mailing lists from students in Tianamen 
Square during the uprising that Spring; messages from Alaskans offering first- 
person accounts of what the oil company wasn't telling us about the Valdez 
disaster. Fresh and unmediated communication about things that mattered from 
far corners of the world-news just hours old, unsanitized by the media. Here 
was information, digitally recorded voices, coming out of the new machine, 
which itself is a vast collection of intercormected machines being used as 
conduits for human thought. Where the Haitian freelance typist was hidden and 
voiceless behind four middlemen and had no hope of a phone no less an Internet 
connection, the students in Beijing and citizens of Alaska could talk 
electronically, and there were millions around the world who could and did 
listen immediately, electronically, and no one stopped them. The Internet is an 
open network, distributed, not contained, not owned by anyone. 

I don't know if any Chinese students or Alaskan citizens profited in a commercial 
sense from their posting or "publishing" on the Internet— for, after all, what is 
publishing but writing for public consumption, regardless of the means of 
distribution or, in the case of Internet publishing, access-but they profited in 
other perhaps more valuable ways by making their voices heard as witnesses to 
events of their time. Clearly, in this case, the new and networked machine did 
not function simply as an output facilitator, a means of replication for familiar 
words on a paper page. It functioned as a kind of worldwide broadcasting 
medium. 

Call it epiphany thanks to insight from the above incident, or call it simply local 
economic necessity, our business shifted in the direction of electronic publishing, 
and away from paper- based publishing. Another shift in the tide. The first major 
step in the new direction, which involved us creating work rather than 
producing it for publishers, was _The Internet Companion: A Beginner's Guide 
to Global Networking_by Tracy LaQuey, which was the first popular trade book 
about the Internet back in 1992. This book, produced with lightning rapidity and 
permed by a very gifted and knowledgeable author, seemed to grow beyond 
itself even before it was born and soon became a bestseller. At a time when there 
was precious little current copyright information on the Internet, and Acceptable 



Use Policies stood in the way of for-profit publishing on the Net, we couldn't just 
put a book up there with a pricetag on it. It was a brave act for Tracy LaQuey to 
take the innovative leap, to take the words we both wanted people to pay for in 
the bookstores and give them away, in ASCII, on the Internet. That was the 
beginning of the Online Bookstore in 1992. Many thousands came and grabbed 
those files; many wrote in asking for more. None of the users paid a dime. 

However, a conundrum is a paradox of sorts, and counterintuitive as it may 
seem, giving the ASCII files away by anonymous FTP spurred the print sales of 
the book. Who wants to read hundreds of pages in ASCII, anyway? Even our 
publisher was supportive of our effort and happy with the resulting sales figures. 
They are not alone. Prentice Hall publishes Brendan Kehoe's "Zen and the Art of 
the Internet," which is available for free on the Net. His book continues to sell 
very well. The same applies for MIT Press's publication, "The Hacker's 
Dictionary," which is available for free on the net and sells briskly in paper as 
well. This leads to conundrum number one: that giving something valuable away 
for free can make money. It points to a richness not found in the tangible world 
quite so readily: the more I give to you the more I have. Some call this a new kind 
of marketing, and this was a pleasing lesson to learn. But was this experience 
really online publishing, or was it the success of an early hybrid of online/ paper 
publication?. 

The popularity of the online Internet Companion ASCII files drew my attention 
further away from paper, and I was seduced by the prospect of the then 10 
million people on the Internet~10 million literate people with disposable 
incomes—attached to the Net. Why not acquire lots of Internet rights to lots of 
books and put them online at the Online BookStore? Surely some percentage of 
those people would buy files of a popular author's books for a reasonable price. 
So to test the concept that people would pay for books online, we approached 
one of the best-selling authors on the planet, Stephen King, and acquired first 
serial rights to a story from his new book, "Nightmares and Dreamscapes." The 
numbers were enticing: if only one percent of the ten million people paid $5 for 
Stephen King's story, available only at the OBS and only on the Internet, then 
that's half a million dollars! 

We tried to make it as widely appealing and usable as possible: we formatted it 
as a Voyager Expanded Book, in plain ASCII for those with only email access. In 
Adobe Acrobat, in HTML format for Mosaic aficionados, acquired the German 
rights, did a dual language edition, and released in time for the 1993 Frankfurt 
Book Fair, the largest book fair in the world. The result: they all came, the radio, 
the TV, the print media, creating lots of smoke and a nice firm footprint in the 
sand of Internet history, but sales? The half a million dollars in per-copy sales? 
All the companies who participated in bringing this story into its Internet 
incarnation—the Internet Company, Texas Internet Consulting, Viking Penguin, 
Hodder Stoughton, EUnet Germany, Hoffman und Campe, Aldea 
Communications, Bunyip, and the Online BookStore— we didn't pull in enough in 



per-copy sales to pay the phone bills for setting up the deal. A vast amount of 
smoke, a tremendous marketing boost for the printed book again, lots of noise— 
and by extension, lots of profit for the publisher and for the author—but handfuls 
of per-copy sales. The per-copy sales model for a contained publication, a 
publication which is complete in and of itself and is not lirJ^ed to anything else of 
significance on the distributed network, does not seem to work. The OBS is not 
the only online publishing site which has shown these results. 

However, where per-copy faltered, site licensing proved a far better option, 
which resulted in some commercial satisfaction on all sides. We have sold site 
licenses to networks and organizations with good results. Site licensing offers 
exclusivity to the organizations and networks which optioned the work, while 
offering the author the reassurance of a having defined set of users, and a certain 
hedge of protection against rampant copying and posting for a profit of his work. 
One key element in site licensing seems to be timeliness; one publishes first 
online, before the information or ideas grow old and gather moss. Perhaps this 
site license model proves more lucrative than the per-copy sales model because it 
enables the licenser to give the information away for free (after paying for it), 
while achieving a defined benefit, a market advantage over its competitors, by 
giving away scarce information on an exclusive or semi-exclusive basis. 

This same combination of for-free/for pay can be seen in the sponsorship model, 
the third commercial model after the per-copy and the site license, where, in the 
same way that Mobil Oil brings you Masterpiece Theatre, a company might 
sponsor a particular publication distributed for free on the Net. The familiar 
economy of having the book buyer, the purchaser of information, pay for the 
information, is reversed in sponsored publishing. The sponsor wins by having 
his name, his product, associated with the freely distributed text. A discreet 
screen of product information, a company logo attached to a file is all it takes. 
The money then flows thus: the sponsor pays a certain amount, probably 
pennies, each time someone picks up a file by anonymous FTP. The taker pays 
nothing at all. What is being sold here is not the information, but the ^attention* 
of the reader; the information or the ideas function as a conduit for....marketing, 
again. Sponsorship is an easy and risk-free model, for the sponsor. What is at 
risk, of course, is the objective sponsorship of truth. Which company might have 
sponsored the students in Tianamen Square, for example? 

We see this sponsorship model in frequent practice around the Net today, vast 
electronic for-free Internet sandboxes such as SUNsite, funded by Sun 
Microsystems and Cisco Systems and others. The sponsors gain by providing 
their equipment to people making creative use of it, so others will come and see 
what they are doing, and.. .buy the sponsors equipment or products. So, as the 
freely available ASCII files for the Internet Comparuon fueled the sales of the 
printed book, so too the freely available playground sandbox at SUNsite spurs 
the sales of the sponsors' wares. It is kinetic advertising at its best, and it 



capitalizes on the fundamental shift in economics which fuels the new machine, 
the shift from the economy of scarcity, of buying and selling things, ideas 
incarnated as physical things, to the economics of abundance, where what is for 
sale isn't a thing at all, but the minds, the attention, of those paying attention to 
the ideas and information. Such an apparently "free" online environment makes 
for a welcome change, away from our common human penchant for owning and 
hoarding things with price tags on them. In the economy of abundance, the 
status of having shifts to the status of having access. 

The notion of having access points to a fourth possible business model of 
publishing on the Net: subscription-based publishing. In the globally distributed 
multimedia hypertext environment— that's a mouthful, but how else do you say 
it?~an environment where the traffic increases in the hundreds of thousands of 
percent annually, and nothing is but what it not, a subscription seems like 
another logical approach. Think of the digital stream analogy—does one want to 
buy a piece of the stream in a bottle, or does one want to subscribe to the stream 
and with that monthly subscription fee get all the fish, the poUywogs, the 
flowing water in which to bathe-as well as the flotsam and the jetsam from the 
guys upstream. 

But even the subscription model comes up wanting in the Mosaic environment. 
Mosaic is, at this point, a free multimedia "browser" on the World Wide Web of 
interconnected computers. Widely hailed as the "killer app" for online 
publishing. Mosaic enables the users to navigate around the computers of the 
world, accessing, picking up, customizing anything that can be digitized—for 
free. But even were there toUgates firmly in place on every server in the world, 
still, I think the traditional subscription model would at least need adaptation 
from what we think of today when we think of a subscription to, say, cable TV or 
"The New Yorker," because Mosaic epitomizes the three defining aspects of the 
online publishing environment which are not found together in other broadcast 
and print media: its distributed, interactive, and recorded nature. 

A year ago, in the pre-Mosaic boom days, it seemed to the point to say that 
"Content is King," and to think that successful online publishing meant offering 
easy and commercially viable access to content. It only takes a short journey with 
Mosaic, which has a learrung curve of under half an hour for the begirming user, 
to realize that content is everywhere, and more is available every day. Content 
alone fast becomes irrelevant in the absence of context. What good are a hundred 
novels online, if the Net, the means of access, is not exploited to create a context, 
a way of thinking about and reading these novels? Might we not learn from the 
above for-free experiences, and consider a publishing model where readers are 
allowed free access to those novels, in return for the readers allowing a publisher 
to record and study their thought paths, the links they make while reading, 
thiriking, and studying online? One may not want to pay $5 for an online 
"contained" or finite, static, linear text of James Michener's "Chesapeake", but one 
might pay considerably more if one could follow the electronically generated 



thought path resulting from a course taught by the author himself about factual 
fictiori, a course where one could navigate the links students make in their critical 
thinking about the novel, navigate and link to related documents, graphics, 
videos, sounds, experiences, and the author himself —all in real time. How does 
one charge for such a contextual experience? What is in fact being published, and 
what is for sale? In the kinetic publishing environment, apparently the static text, 
the words, become subsidiary to their context as determined by each individual 
user. 

The idea of publishers or other entities electronically tracking people's thought 
brings to mind George Orwell's "1984": "The telescreen received and transmitted 
simultaneously. Any sound Winston made, above the level of a very low 
whisper, would be picked up by it; moreover, so long as he remained within the 
field of vision which the metal plaque commanded, he could be seen as well as 
heard. There was of course no way of knowing whether you were being watched 
at any given moment. How often, or on what system, the Thought Police 
plugged in on any individual wire was guesswork. It was even conceivable that 
they watched everybody all the time. But at any rate they could plug in your 
wire whenever they wanted to. You had to live~did live, from habit that became 
instinct—in the assumption that every sound you made was overheard, and, 
except in darkness, every movement scrutinized..." 

In the new field of kinetic publishing, the currency becomes thought itself, 
organized thought generated both individually and collectively, done so in a 
reciprocal environment.. One can envision an environment then where, like the 
big corporations funding places like SUNsite, perhaps individuals might 
segment their own computers, their own servers, into public and private sites. 
Given this scenario, publishing loses its lustre as an exclusive glamour industry, 
ceases to be an organized corporate activity and becomes rather a way of 
reciprocal interaction among minds, a commuruty of thought where one pays for 
access to people and ideas in varying states of organization. 

Online publishing is commercially successful today in the marketing sense, 
successful for those of us who still try to own and hoard, owning things as a 
bastion against mortality perhaps- -such marketeers are successfully protecting 
their back end business by doling out carefully controlled portions in obvious 
marketing efforts: a chapter here, a blurb there~and then selling the printed book 
or the manufactured product. Publishing on the individual level, however, might 
be more spontaneous, more complete, a freer marketplace of ideas that will 
enable the testing of the concept that time and attention can indeed prove 
valuable currency-currency which may not be defined in dollars- -online. Such 
an individual as a publisher might make a living on the Net, make his own 
Home Page, turn his "E" drive into a fast food joint or a used book shop along the 
Infobahn, into a public sandbox for people to link to and peruse, while 
maintaining a private segment to which real time access is licensed or sold, like 
having "This Space For Rent" (point to head). 



Charging for thought, kinetic, real time thought, combined with recorded 
thought, what we used to call publications, might make money on the Internet. 
Again, as with the first Internet Companion example, this model is a hybrid, 
between what is living, real-time thought, and what is dead, that which is 
already recorded. .We think by association, and associations are links; By 
thinking about something or someone we give it value. The World Wide Web of 
computers, where traffic in 1993 increased 341,000%, is a hypertext environment 
allowing for the globalization of associative thought, the accessing and weaving 
together of chunks of information into customized sets. Anything that can be 
digitized can be linked to: texts, graphics, videos, sounds, experiences such as 
online museum exhibits and libraries, and people as well can be linked to texts in 
real time via email. What is for sale in this hyperlife environment is the naming 
and pointing to resources, either live or dead, kinetic or static. If I were a net 
architect tasked with building an Ethernet and my boss wanted it done by 
tomorrow morning, I would pay dearly for the name of and online access to Bud 
Spurgeon, an Ethernet expert here at UT, and pointers to his online documents, 
and would pay most of all for access to him in real time to help me solve my 
problem. This problem might be worth a thousand dollars torught, and nothing 
tomorrow, if I lose my job because I couldn't get the network up and rurining. If 
the online publisher offering this access to Bud, access which travels right up the 
chain of the hierarchy of intimacy from email to phone and even face-to-face, that 
publisher would be capitalizing on the multimedia capabilities of the webbed 
environment. 

We are talking about buying and selling people in real time. This gets me back to 
the topic at hand: slavery. But no longer are we simply talking about typesetting 
a janitor's manual in Haiti, of tying people to keyboards so they can make the 
machines spit out pages in a highly regulated format. We are talking about 
selling the digitized mind of a human being who chooses to sell access to his own 
real-time interactive original thought. It would be prudent to strike a note of 
caution, a note given sonority by Orwell's words quoted earlier, and in light of 
the marketing lessons repeatedly learned from the commercial publishing 
models mentioned earlier: per copy, subscription, site license, and, importantly, 
sponsored publishing. It might prove worthwhile to identify two obvious routes 
we can follow at this juncture: the new field of transcendental computing, or the 
digitized slave route. 

In a Webbed hyperlinked universe where pointing and naming is the way we 
know and make ourselves known, the latter route seems a distinct possibility, 
given the path blazed by our marketing and advertising folks on Madison 
Avenue. Think of athletes who function as flesh masked in a blaze of corporate 
insigruas, logos and endorsements. In the or\line recorded environment, words 
matter: If I were really a savvy businessperson, I could charge companies for the 
spontaneous words I utter in support of their efforts. Bunyip programmers are 
brilliant. Texas Internet Consulting corners the market on Net demographics. 



WAIS defines the standard for searching information on the Net. The Internet 
functions thanks to Cisco routers. Aldea Communications. Cyberspace 
Development Corporation. American Airlines. NEARNET. EUNET. Addison- 
Wesley. Milliman & Robertson. M&Q Plastics Company. Patterson Public 
Schools. It would be fair business practice for me to charge entities for my verbal 
endorsements because I have an audience, whether in real-time reality or 
virtuality. So my value as a pointer to others depends on the current value of my 
state of thought, and this whole models splits into two options: either the 
corporate slave model where people and their online incarnations are bought and 
sold, or to the new field of transcendental computing where creative Muse is 
supported. The second, and less commercially viable model, is the transcendental 
computing model, where the individual publisher is egoless in the distributed 
environment and functions independently of supporters to think objectively and 
deliberately, rather than thinking for the purpose of advancing either himself or 
his sponsor. Commercializing this model would be tantamount to marrying the 
transcendental eyeball with the OCR scanner, hardly an appealing prospect. It 
seems realistic to suppose that we are headed in the sponsorship direction, 
supplemented perhaps, ideally, by transcendental computing on the academic 
side. 

If we look around us now, we can see lots of other people making money from 
the Internet. People selling hardware, connectivity, and software, they are 
making money. They are the means-makers. But once acceptable means are in 
place for, say, W3, what then? Will we see trading in the form of link brokers and 
URL futures? Will humans be bought and sold for their minds rather than for 
their ability to wash dishes or pick cotton? The Internet today is a multimedia 
environment, and it might be useful to consider the record industry for a final 
thought about where all this is going, for the conundrum before us involves 
assigning value to both recorded and live iriformation. Recorded thought, ideas, 
or music, is in a sense dead. It is live when it is reciprocal, as a concert is 
reciprocal, or as, in a way, Karioke is reciprocal. As soon as the Rock band The 
Doors recorded "Break on Through", it became posterity, static, a commodity to 
be bought and sold, a commodity which increased in value after Jim Morrison 
himself was dead at a young age. In the New Machine, the recording of "Break 
on Through To The Other Side" might be available for free, while access to 
Morrison would cost dearly, and access to Karioke interaction with the Doors 
would cost as well.. These are the living, interactive links I am referring to, the 
links that bind us to our new online environment and enrich us, rather than the 
links that fetter us in servitude to the Great Records machine we are in the 
process of creating. 



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